WASHINGTON-An upcoming House bill could diminish the Pentagon’s role in deciding the terms and conditions governing the transfer of Department of Defense spectrum to the mobile-phone industry for third-generation wireless systems, a move designed to put Commerce Secretary Donald Evans in charge of the process.
The bill, written by the cellular industry and set to be unveiled later this summer, is expected to be championed by Rep. Fred Upton (R-Mich.), chairman of the House telecommunications subcommittee, and Rep. Chip Pickering (R-Miss.), co-chair of the congressional wireless caucus.
The Cellular Telecommunications & Internet Association and its members have been shopping the bill on Capitol Hill for months.
Pickering, House Commerce Committee Chairman Billy Tauzin (R-La.) and Senate Commerce Committee Chairman Ernest Hollings (D-S.C.) addressed CTIA’s board of directors last week. While there is no indication Hollings will sponsor companion legislation in the Senate, Tauzin is expected to be closely involved in crafting the House bill.
“We do believe legislation is necessary,” said Mike Chappell, deputy chief of staff to Pickering. But he added, “We want to take our time to do this right.”
Upton’s office did not return calls for comment.
While the industry bill would have the mobile-phone industry spend billions of dollars to modernize military communications systems relocated from the 1700 MHz band to other frequencies, the Pentagon is apt to fiercely oppose any legislation that muffles its voice in the debate.
“The provision of the `99 and ’00 Defense Authorization Act that protect DoD in the event of spectrum reallocation are necessary to preserve crucial military capabilities and should not be changed,” said Admiral Robert Nutwell, deputy assistant secretary of defense for communications, control and command and intelligence and space systems.
Under the National Defense Authorization Act of 2000, any decision to relocate military users requires alternative spectrum be technically comparable and that such a determination be agreed to and certified to Congress by the Commerce and Defense departments as well as the chairman of the joint chiefs of staff. Industry-crafted legislation represents a frontal attack on that law, which is intended to serve as a safety net for DoD in the aftermath of the government’s loss of 235 megahertz to the private sector since the early 1990s. Anything that threatens that safety net is a sure-fire deal-breaker, according to a Pentagon source.
The mobile-phone industry realizes the 2000 law is a formidable obstacle to securing 1700 MHz spectrum from DoD, since it allows the Pentagon to veto any 3G spectrum deal.
“Once a piece of legislation is introduced, we will be very happy to review it as we do all bills affecting the Department of the Defense,” said Susan Hansen, a Pentagon spokeswoman.
Because of global roaming and production advantages, 1700 MHz is favored by industry over the other two bands-700 MHz and 2500 MHz-that were identified for 3G services by the World Radiocommunication Conference last year in Turkey.
Evans met last week with religious and education leaders and fixed wireless Internet executives, who want a swift decision to take the 2500 MHz band off the table. The Federal Communications Commission has concluded the 2500 MHz band cannot be shared with mobile-phone carriers, and the agency could not find alternative frequencies to accommodate fixed-wireless licensees.
Peter Howley, chief executive officer of IP Wireless, said lack of certainty on the status of the 2500 MHz band is hurting capital formation. “From a public policy standpoint, this issue is pretty black and white,” said Howley. Startups, like IP Wireless, and telecom giants, like WorldCom Inc. and, Sprint Corp., believe the business model for high-speed Internet access favors fixed wireless over an uncertain 3G business marred by early technical problems, investor uncertainty and heavy carrier debt.
TV broadcasters, meanwhile, remain comfortably ensconced in the 700 MHz band.
Steven Berry, senior vice president of government affairs at CTIA, said he believes the industry bill strengthens the 2000 defense authorization act by guaranteeing that the Pentagon directly receive money raised in the 3G auction. A Pentagon spectrum trust fund, for example, could be set up for DoD to draw on in the near-term for communications upgrades and later for other purposes.
The reimbursement package is a highly attractive selling point, given the many billions of dollars needed to reform the military and the fact that those costs were not factored into the $1.35 trillion tax cut signed into law last week by President Bush.
While Evans has signaled support for the mobile-phone industry, Defense Secretary Donald Rumsfeld, overseeing a top-to-bottom military review, has kept his views on the 3G spectrum controversy closely guarded. Top military brass are strongly opposed to surrendering the 1700 MHz band to wireless carriers. The armed services say military capability will be compromised if they are forced to give up the 1700 MHz band.
DoD and the mobile-phone industry disagree on whether the Pentagon’s 1700 MHz band can be shared with wireless operators.
As the debate lingers, it has drawn into the fracas economists and national security aides at the White House and others.
The 3G-spectrum issue is reaching a critical juncture. The FCC, under a timetable established last October by the Clinton administration, is supposed to make a final 3G-spectrum ruling by July 30. CTIA last week asked FCC Chairman Micheal Powell to delay the ruling.
Moreover, the FCC is required by law to auction part of the 1700 MHz band in September. With so much uncertainty surrounding the matter-exacerbated by a new spectrum skirmish between the mobile phone and mobile satellite industries-there has been talk of the FCC issuing a new proposal seeking comment on 3G spectrum options not initially considered. The House bill likely will seek a delay of this fall’s auction.
